Business chiefs call for single market access after Brexit

The CBI has called for the UK to remain in the single market and customs union until a new trade deal has been finalised.

Carolyn Fairbairn, CBI director-general, said it was “common sense” for the status quo to remain in place until a final deal was agreed, and that multiple changes – to an interim deal and then to a final deal – would be wasteful.

Speaking at the LSE today, Fairbairn said: “This would create a bridge to the new trading arrangement that, for businesses, feels like the road they are on. Because making two transitions… would be wasteful, difficult and uncertain in itself.”

“One transition is better than two and certainty is better than uncertainty,” she said.

The prize of continuity would be “more investment, more jobs and reduced uncertainty” for both UK and EU firms, she added.

Under EU treaty rules, negotiations for leaving are restricted to two years from the triggering of Article 50, which prime minister Theresa May did in March, unless the remaining 27 countries unanimously agree an extension.

But Fairbairn said it was impossible to imagine a new trade deal being in place by the deadline of March 2019, “even with the greatest possible goodwill on both sides”.

The CBI has previously called for continued free trade with Europe after Brexit. It signed an open letter to the government when negotiations officially started in June, alongside a number of other business bodies, calling for retained access to the single market and frictionless boarders.

Separately, Michel Barnier, the EU’s chief negotiator in the Brexit talks, has said frictionless trade would not be possible if the UK left the single market.

Speaking to a European Commission committee yesterday, Barnier said the UK had defined a number of red lines – including on freedom of movement and the role of the European Court of Justice – that implied it would leave the single market and customs union.

He said: “The decision to leave the EU has consequences. And we have to explain to citizens, businesses and civil society on both sides of the Channel what these consequences mean for them.

“Business should assess, with lucidity, the negative consequences of the UK's choice on trade and investment. And prepare to manage them.”